Microeconomics: The Measurement of Income, Prices, and Unemployment

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Macroeconomics, 12e (Gordon)
Chapter 2 The Measurement of Income, Prices, and Unemployment

2.1 Why We Care About Income

1) Job openings are plentiful when the
A) actual real GDP is above the natural real GDP.
B) natural real GDP is above the actual real GDP.
C) natural real GDP is increasing rapidly.
D) None of the above.
Question Status: Previous Edition

2) The real income per capita is a measure of the
A) well-being of every individual in the nation.
B) well-being of the average individual in the nation.
C) well-being of the average employed person in the nation.
D) total well-being of the nation.
Question Status: Previous Edition

2.2 The Circular Flow of Income and Expenditure

1) GDP can be measured by the
A) total value of all sales in the economy.
B) total market value of final goods and services produced in the economy. C) total value of all intermediate goods produced in the economy. D) net national product plus investment.
Question Status: Previous Edition

2) Assume a simple economy without a government and that saving and borrowing behavior is never observed. Then the value of A) production is equal to income.
B) expenditures is less than the value of production.
C) production is less than the value of expenditures.
D) production is less than income.
Question Status: Previous Edition

3) From the last five recessions, the mildest two were
A) 1975 and 2008-09 recessions.
B) 1981-82 and 2008-09 recessions.
C) 1990-91 and 2001 recessions.
D) 1975 and 2001 recessions.
Question Status: New
4) The circular flow of income describes the
A) flow of income from domestic firms to the nonproduction sector and back again. B) amount of money in the economy.
C) sum of all injections into the economy.
D) sum of all withdrawals from the economy.
Question Status: Previous Edition

5) Changes in business inventories
A) are included in gross but not in net investment.
B) can either be positive or negative.
C) are not included in GDP because they are not sold to anyone. D) are only partly included in GDP because part of these are holdings of intermediate goods. Question Status: Previous Edition

Figure 2-2

6) Employing the data from Figure 2-2, income Y is equal to
A) $3,000,000.
B) $3,300,000.
C) $3,600,000.
D) $5,100,000.
Question Status: Previous Edition

7) Negative net exports represent reduced investment because A) payments for imports will be used by foreigners to buy domestic goods in the future. B) payments for exports will be used by foreigners to buy domestic goods in the future. C) payments for imports will be used by U.S. citizens to buy domestic goods in the future. D) None of the above.

Question Status: Previous Edition

8) When the dollar strengthens,
A) exports will increase and U.S. consumers benefit.
B) imports will increase and U.S. consumers benefit.
C) exports will decrease and U.S. exporters benefit.
D) exports will increase and U.S. exporters gain.
Question Status: Previous Edition

9) When the dollar depreciates,
A) exports will increase and U.S. consumers benefit.
B) imports will increase and U.S. consumers benefit.
C) exports will decrease and U.S. exporters benefit.
D) exports will increase and U.S. exporters gain.
Question Status: Previous Edition

10) In the simple circular flow model containing just households and business firms, all income is received by households in exchange for A) consumer expenditures.
B) wages.
C) labor services.
D) product.
Question Status: Previous Edition

11) In the simple circular flow model containing just households and business firms, the entire product flows to ________ in exchange for ________. A) business firms, labor services
B) business firms, wages
C) households, consumer expenditures
D) households, labor services
Question Status: Previous Edition

12) Which of the following is NOT a "flow" variable?
A) government debt
B) consumption expenditure
C) labor...
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